Friday May 25 – Retracement

Well, I have already had my morning run. I am sitting on my hands for short trades, and looking for a few longs.


Morning report:
Well, I have already had my morning run. I am sitting on my hands for short trades, and looking for a few longs. I looked closely at 14 possible calendar set ups. I like two BBBY July/Aug 40p, and a double-calendar with Palm July/Aug 15p and 17.5p. Not much else. I want to get a couple good Calendars on before the weekend, to take advantage of a slow friday, and a long weeked (theta decay)
I was just filled for 1 unit on Palm Jul/aug 17.5p for .16 (it took about 10 minutes to fill), Mid-spread price went up to .20 immediately, then settled at 17.5. I have another 1 unit order for .14.
PALM%20chart.gif
I am happy to seen the market retrace some of its loses yesterday. I sold my half of AVY near its low yesterday. I am looking to buy my put spread again as it approaches 64.10 to 64.32. Yesterday, I sold half to allocate addition funds in other places, or trade around a core position in AVY. Volatility has increased in AVY today.
A very nice feature of this trade, especially with the adjustment I made, is This is a Theta decay positive trade below 63.98! Therefore, even though I am long this spread, I am making $$ on time decay below 63.98. So sideways or down is a good thing. (very similar to my AIG Trade).
I was filled on the AVY half unit 65-60p I sold yesterday. Bought back for 1.70
Stop at 64.86. I took the trade at the high of the past few days. We’ll see.
The trend line resistance is @ 64.53
AIG remains in a good place, earning theta decay, or gaining as the price drops in the underlying.
EK and CIEN are acting beautifully as calendars, up a little over double for the week.
I am bullish on JADE Oct 10 straddle, I took on the trade as a long call (4 contracts) based on a W4 buy. Then as it crossed it’s high I bought the appropriate amount of puts(10 – Oct 10p) to make the trade Delta Neutral. I didn’t call the high. But on the recent pullback, I sold a number of the puts (6) for a nice profit. I am still looking for a nice ride up to 14.02 by July 3rd.
JADE%20chart.gif
I am still watching, BLUD, HLEX, for longs, using trendlines
AVY and FXI for possible short. I’m looking for an edge.
As you can probably see, my tendency is to look for at least 2 of 3 ways to win on a trade. i.e. sideways (theta decay), or down, or up. I will continue to learn Broken-Wing Butterfly type trades. I would like to see a higher VIX before I start doing more of these.
I’m going on a bike ride now. I will, do another look over my calendar finder this afternoon before the close. I need to get a little PrePaid Legal going too.

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